As India sets election dates, traders brace for stock rally

The election commission has set April 7 as the start of parliamentary elections, with voting to be held in nine staggered phases until May 12. If history is any guide, investors should be very much looking forward to it.

The benchmark BSE Sensex has gained in the month before elections in each of the previous six elections, with the biggest advance coming in 2009 when the Congress-led United Progressive Alliance won a majority.

The gains in the run-up to elections can be explained by a mix of expectations for policy reforms and election spending, according to traders.

Traders expect especially strong gains this year as solid foreign investor flows, a more stable rupee on the back of a narrowing current account deficit are more than offsetting global uncertainties such as the U.S. Federal Reserve's tapering of its monthly bond buying.

Still, although markets widely expect a victory for the main opposition party BJP , whether it can clinch a majority could be the joker in the pack, although similar uncertainties about outcomes in previous elections have not prevented gains.

"A pre-election rally is definitely underway. Flows, positioning, macro are all pointing towards its extension in the coming months," said G. Chokkalingam, founder of Equinomics, a research and fund advisory company.


  • Centre and states must cooperate to get the economy moving

    Mirroring the previous three quarters, another round of tepid corporate earnings announcements are expected in a few days from now.


Stay informed on our latest news!


Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs


Arun Nigavekar

Ranking of higher education institutions

Given the massive popularity and growing influence of world university ...

Rajgopal Nidamboor

The pursuit of serene stillness

It may sound strange — that every change in the ...

Dharmendra Khandal

How positive intervention can go a long way

Ten years ago, Sariska tiger reserve declared that there were ...


William D. Green

Chairman & CEO, Accenture